What is the difference between professional indemnity insurance and professional liability insurance?

Professional indemnity insurance and professional liability insurance are both types of insurance that help protect professionals from financial harm caused by their mistakes or negligence. However, there are some distinct differences between the two. Professional indemnity insurance covers professionals for losses incurred by third parties if they make a mistake or provide incorrect advice. This is because they have a duty to provide competent and accurate services, and professional indemnity insurance can help cover any costs of rectifying the damage caused by their mistake. Professional liability insurance, on the other hand, is meant to cover claims for professional negligence. This includes any losses that an individual or organisation might incur due to the negligence of a professional. The North Carolina State Board of Insurance defines professional negligence as “conduct which falls below the standard of care reasonably expected of a competent professional in the same or similar circumstances.” Professional liability insurance can help cover the costs of defending or settling a claim for professional negligence. In summary, professional indemnity insurance covers mistakes and incorrect advice, while professional liability insurance covers claims for professional negligence. Both types of insurance are vital to protect professionals in North Carolina from financial losses caused by their mistakes.

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What is the difference between professional indemnity insurance and professional liability insurance?

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